The smell of greed

After describing my column as ‘a load of manure’, one of the commentators on my Economy Lab post today suggested that the Maritimes need more jobs in the $35,000-$60,000 range and not more in the $100,000 and up range. I guess this is one point of view but if your objective is to become economically self-sufficient as a region, I don’t see how the numbers would work. The following table shows the income taxes paid distribution in New Brunswick. My manure-loving friend wants to create a lot of jobs in the second and third quintiles. Again, not a bad thing but if you really want to drive tax revenue we need to see a little more job creation at the higher end of the distribution. The fourth and highest income quintiles, even though they represent a fraction of total income earners, pay 84 percent of total income taxes in New Brunswick.

I know people don’t like the word ‘greed’ – it is a term with a very negative connotation – but if we understand where tax revenue is generated and if we want to keep taxes low on those in the lower and middle bands – we need to get more folks at the higher end.

It is certainly true that folks earning higher incomes have a range of tax avoidance opportunities but in the end they still get large tax bills.

One Response to The smell of greed

The corporate tax rate in Canada is 15 per cent effective January 2012. This is the lowest corporate tax rate of all G8 countries (p. 35). In which income quintile do you think the majority of corporate shareholders reside? For people living in the top income quintile what percentage of their income comes from market labour, as presented in the chart above compared to their income earned from investments which are taxed so low? For example the CEO of one company I know earns 1 million in income but 11.1 million total in income, bonus and shares. He therefore pays, 60.3 per cent tax on 9 per cent of his income, 15 per cent on other portions and none on other portions. Bark all you want but at least bark up the right tree.
Swift, Richard (editor), 2013. The great revenue robbery: How to stop the tax cut scam and save Canada. Between the lines: Toronto, ON.